What happens to marginal productivity as workers who are equally good at their job are added to a firm?
a. The increase in workers will eventually cause marginal product to fall.
b. Marginal product will rise at a steady rate.
c. Marginal product will neither rise nor fall.
d. Product quality will improve as the new workers gain experience.
a. The increase in workers will eventually cause marginal product to fall.
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Suppose that the U.S. interest rate is 5 percent and the Turkish interest rate is 50 percent. The effect of this difference in the foreign exchange market is that
A) financial capital stops moving. B) an American investor is guaranteed to make an additional 45 percent in dollar terms by investing in Turkey. C) investors expect the Turkish currency to rise in value (appreciate) against the dollar. D) investors expect the Turkish currency to fall in value (depreciate) against the dollar.
According to the factor price equalization theorem, free international trade will result in wages equating rents worldwide
Indicate whether the statement is true or false